Jerry, The expression originated in dog racing (circa 1840) in an event called coursing. An explanation offered some years later, and which seems to agree with the Oxford English Dictionary definition below is that the dog that came in second was called the RUNNER-UP dog “because he RAN through the races (courses) UP to the last race without being defeated once” (see 1890 quote). The earliest example involving a human RUNNER-UP didn’t appear until quite a bit later (see 1886 quote). But runner-up today just means came in second no matter what the method of getting there (single lap, multiple laps, running, swimming, tennis, . . .).

OXFORD ENGLISH DICTIONARY

RUNNER-UPCoursing: A dog that takes the second prize, losing only the final course to the winner.

<1842 “Dividers or RUNNERS UP for stakes of only four dogs.”—Courser’s Annual by Thacker, page 210>

<1856 “The dog beaten by the RUNNER-UP in the last tie but one.”—British Rural Sports, II. III. vii. page 297/1>

<1890 “The dog last running with the winner is called the RUNNER UP, because he ran through the races up to the last race without being defeated once.”—in A. R. Starr in Upland Shooting, page 471>

RUNNER-UP [[plural is RUNNERS-UP]]: generally A competitor or competing team that comes in second or takes the second place, especially one defeated only in the final heat or tie of a series of matches or races.

<1886 “Now Bird is nowhere, while Brown is the RUNNER-UP for the first place.”—Pall Mall, 2 August, page 3/2>

<1887 “In 1873 the Wanderers again won the cup, the RUNNERS-UP being Oxford University.”—Football by Irvine, page 113>

<1949 “The last issue of the magazine will announce the award winner and the RUNNER-UPS.”—Cavalier Daily (University of Virginia), 22 October, page 1/3>

<1955 “Miss Garvey, twice RUNNER-UP was unable to play.”—The Times (London), 16 May, page 13/4>
<
1976 “Highbridge soccer team Bristol Bridge look like losing their chance of finishing RUNNERS-UP in the second division of the Bridgwater and District Sunday Football League.”—Burhham-on-the-Sea Gazette, 20 April>

When I have the occasional bet I am quite happy to have selected the runner up, what I usually get is the "also-ran ".

A horse that does not win, place, or show in a race.
A loser in a competition, as in an election: “had enough support to place him in the middle of the also-rans” (George F. Will).
One that has little talent or success: just an also-ran in the art world.

Wizard of Oz wrote:.. I love that wonderful example of American obfuscation when they refer to someone being "The first runner-up" .. nope we can't have anybody coming second can we .. *smile* ..

There is a distiction normally (and by normally I mean pedantically - I'm sure there are a lot people who use it "inappropriately"). When there's a first, second, third, fourth, ... runner-up, the winner has a special title and the ordinal indicates the order of succession should the winner somehow become not-the-winner, cf Prince Charles is first in line for the throne not the 2nd place royal. In other words, It's not first then first runner-up, but winner/title then first runner-up. The Miss America Pageant has a first-runner up who becomes Miss America if Miss America is hit by a bus, the second runner-up becomes Miss America when that one has a piano dropped on her head, etc. But the apple pie contest has a 2nd place - when the first place apple pie is eaten, the second place pie does not get the blue ribbon but is still 2nd.